Foundations for Business Successes (PDF)

Chapter 10: Leading People and Organizations The following traits demonstrate a strong correlation with leadership: ​ Intelligence: Both general mental ability (IQ) and emotional intelligence (EQ) play a role in leadership. ○​ Individuals with high mental abilities are more like...

Chapter 10: Leading People and Organizations The following traits demonstrate a strong correlation with leadership: ​ Intelligence: Both general mental ability (IQ) and emotional intelligence (EQ) play a role in leadership. ○​ Individuals with high mental abilities are more likely to be perceived as leaders. ○​ High EQ, characterised by self-awareness, motivation, empathy, and social skills, is also crucial for effective leadership. ​ Personality: Several traits from the Big Five personality framework relate to leadership emergence and effectiveness. ○​ Extraversion, the strongest predictor, is associated with sociability, assertiveness, energy, and self-confidence, making extraverts more likely to emerge as leaders in various situations. ○​ Conscientiousness, marked by organisation, initiative, and persistence, also increases the likelihood of leadership emergence and effectiveness. ○​ Individuals with openness to experience, who are original, creative, and willing to try new things, also tend to emerge as effective leaders. ​ Self-Esteem: Leaders with high self-esteem are more supportive of their subordinates and administer punishment more effectively. High self-esteem may contribute to greater self-confidence and a more charismatic image. ​ Integrity: Effective leaders typically possess a strong moral compass, demonstrating honesty and integrity, which fosters trustworthiness. Conversely, some traits are negatively correlated with leadership: ​ Agreeableness - Individuals who are modest, good-natured, and avoid conflict are less likely to be perceived as leaders. Leader Behaviours ​ Task-Oriented Behaviours: These behaviours, sometimes referred to as initiating structure, involve: ○​ Structuring subordinate roles ○​ Providing clear instructions ○​ Engaging in behaviours that enhance group performance. ​ Task-oriented behaviours are essentially directives aimed at accomplishing tasks and meeting organisational goals.​ ​ People-Oriented Behaviours: Also known as consideration, these behaviours centre around: ○​ Demonstrating concern for employee feelings ○​ Treating employees with respect.  ​ People-oriented leaders genuinely prioritise the well-being of their employees and reflect this concern in their actions and decisions. Impact of Leader Behaviours: ​ People-oriented behaviours tend to foster higher levels of employee satisfaction and more positive employee reactions. ​ Task-oriented behaviours generally lead to slightly higher productivity. Contextual Influences on Leader Behaviours: ​ Task-oriented behaviours have been found to be more effective in smaller companies compared to larger organisations. ​ Excessively high levels of task-oriented behaviours can lead to employee burnout. Leader Decision-Making Styles: ​ Authoritarian Decision Making: The leader makes decisions independently, without necessarily involving employees in the process. ​ Democratic Decision Making: Employees are actively involved in the decision-making process. ​ Laissez-Faire Decision Making: The leader takes a hands-off approach, allowing employees to make decisions with minimal guidance or involvement. Effectiveness of Decision-Making Styles: ​ Democratic decision-making styles are generally associated with: ○​ Higher employee satisfaction. ○​ Weaker effects on decision quality and employee productivity. ○​ Employees valuing the overall participative climate over involvement in every single decision. ​ Employee preferences for decision-making styles can vary: ○​ Scientists in a research organisation preferred democratic leadership over authoritarian leadership. ○​ Employees in large groups with limited interaction opportunities favoured authoritarian leadership. ​ The effectiveness of a decision-making style can also depend on the individual leader's approach and personality. For instance, both authoritarian and democratic styles have been employed by successful leaders. ​ Laissez-faire decision making has been linked to: ○​ Negative employee perceptions of leader effectiveness. ○​ Lower employee satisfaction. ○​ Higher levels of ambiguity about job expectations and increased workplace conflict. Limitations of Behavioural Approaches: ​ Organisational type (e.g., business, military, educational institution) ​ Organisational size ​ Industry qUnderstanding Contingency Approaches to Leadership The limitations of trait and behavioural approaches to leadership, which failed to consider the impact of the environment or context, led to the emergence of contingency approaches. Contingency approaches move away from seeking universal leadership traits or behaviours and instead focus on identifying the situations under which different leadership styles are most effective. Fiedler's Contingency Theory One of the earliest and most influential contingency theories is Fiedler's Contingency Theory. This theory proposes that a leader's effectiveness is determined by the interaction between their leadership style and the favourableness of the situation. Measuring Leadership Style: Fiedler uses the Least Preferred Coworker (LPC) scale to assess leadership style. Individuals taking the LPC survey rate their least preferred coworker on various dimensions, such as friendliness, niceness, and cooperation. ​ High LPC score: Individuals who can describe their least preferred coworker in positive terms are considered people-oriented leaders. They can separate their personal feelings from their ability to work effectively with someone. ​ Low LPC score: Those who view their least preferred coworker negatively are classified as task-oriented leaders. They struggle to separate personal dislike from their ability to work with someone. Fiedler's theory views the LPC score as a relatively stable personality trait. Situational Favourableness: According to Fiedler, a situation's favourableness depends on three factors: 1.​ Leader-subordinate relations: The quality of the relationship between the leader and the group members. 2.​ Position power: The amount of formal authority the leader possesses. 3.​ Task structure: The degree to which tasks are clearly defined and structured. A highly favourable situation would involve good leader-subordinate relations, high position power, and a structured task. Conversely, a highly unfavourable situation would be characterised by poor leader-subordinate relations, low position power, and an unstructured task. Matching Leadership Style to Situation: Fiedler's theory predicts the following: ​ Low LPC (task-oriented) leaders are most effective in highly favourable and highly unfavourable situations. ​ High LPC (people-oriented) leaders are more likely to succeed in situations with moderate favourableness. Evaluation of Fiedler's Theory: Research provides partial support for Fiedler's Contingency Theory. While there is stronger evidence for the effectiveness of low LPC leadership in specific situations, the predictions regarding high LPC leadership have received less support. Despite its limitations, Fiedler's theory made a significant contribution by explicitly acknowledging the importance of context in leadership. It provides a framework for understanding when task-oriented versus people-oriented leadership might be more effective. Situational Leadership Theory Another contingency approach is Situational Leadership Theory (SLT), developed by Kenneth Blanchard and Paul Hersey. SLT posits that leaders should adjust their leadership style based on the developmental level of their followers. Follower Readiness: SLT defines follower readiness as a combination of competence and commitment. The theory identifies four levels of follower readiness: ​ Low competence, high commitment: Followers are enthusiastic but lack the skills to perform effectively. ​ Low competence, low commitment: Followers lack both the skills and the motivation to perform. ​ Moderate to high competence, variable commitment: Followers have developed some skills but may lack confidence or commitment. ​ High competence, high commitment: Followers are highly skilled and motivated to perform. Matching Leadership Style to Follower Readiness: SLT proposes four leadership styles, each aligned with a different follower readiness level:  ​ Directing: Providing specific instructions and close supervision, suitable for followers with low competence and high commitment. ​ Coaching: Combining direction with support and encouragement, appropriate for followers with low competence and low commitment. ​ Supporting: Emphasizing shared decision making and emotional support, beneficial for followers with moderate to high competence and variable commitment. ​ Delegating: Granting followers autonomy and responsibility, ideal for those with high competence and high commitment. SLT in Practice: SLT has been widely adopted in management training programmes, with millions of managers globally receiving SLT training. However, research findings on the theory's effectiveness have been mixed. While SLT provides a straightforward framework for adapting leadership style to follower needs, its overreliance at the expense of other models is not advisable. Path-Goal Theory of Leadership Developed by Robert House, Path-Goal Theory draws on the expectancy theory of motivation. It emphasizes the leader's role in clarifying the path for followers to achieve their goals and ensuring that those goals are aligned with organisational objectives. Core Principles: Path-Goal Theory suggests that employees are motivated when they believe: 1.​ Their effort will result in high performance. 2.​ High performance will be rewarded. 3.​ The rewards are valuable to them. The leader's primary responsibility is to ensure that all three conditions are met. They achieve this by: ​ Removing obstacles that hinder employee performance. ​ Creating a motivating work environment. ​ Linking employee efforts to performance and rewards. Four Leadership Styles: 1.​ Directive: Providing clear instructions, setting schedules, and clarifying expectations. Effective when employees experience role ambiguity or lack clarity about their tasks. 2.​ Supportive: Offering emotional support, treating employees with respect, and demonstrating concern for their well-being. Beneficial when employees face high stress levels or perform repetitive tasks.  3.​ Participative: Involving employees in decision making. Works well with employees who have high ability and when decisions directly affect them. 4.​ Achievement-oriented: Setting challenging goals and encouraging employees to strive for excellence. Most effective with employees who are highly skilled and motivated to achieve. Vroom and Yetton's Normative Decision Model Victor Vroom and his colleagues developed the Normative Decision Model as a tool to guide leaders in determining the optimal level of employee involvement in decision making. This model presents a series of questions that leaders answer to determine the most effective decision-making style for a given situation. Decision-Making Styles: ​ Decide: The leader makes the decision alone. ​ Consult Individually: The leader consults with each team member individually before making the decision. ​ Consult Group: The leader consults with the team as a whole before making the decision. ​ Facilitate: The leader facilitates a group discussion and collaborates with the team to reach a consensus decision. ​ Delegate: The leader delegates the decision to the team. Leadership styles ​ Transformational Leadership: This approach differentiates between transformational and transactional leaders.​ ○​ Transformational leaders align employee goals with their own, encouraging a focus on the company's well-being rather than individual interests. They use charisma, inspirational motivation, intellectual stimulation, and individualised consideration. ○​ Transactional leaders, on the other hand, focus on ensuring employees exhibit desired behaviours through a system of rewards and exceptions. ​ Leader-Member Exchange Theory: This theory posits that the relationship between leaders and their followers is key to understanding leadership influence.​ ○​ High-quality LMX relationships are marked by trust, mutual liking, respect, and a willingness to go beyond the call of duty. ○​ Low-quality LMX relationships involve less trust, liking, and respect, with interactions remaining within formal job description boundaries.  ​ Servant Leadership: This approach defines leadership as serving the needs of others.​ ○​ Servant leaders prioritize employee development, empowerment, and well-being, often placing these above organisational goals. They also demonstrate a strong moral compass and concern for the wider community. ​ Authentic Leadership: Authentic leaders are encouraged to “be yourself”.​ ○​ They possess a deep understanding of their own values and priorities, act in accordance with those values, and demonstrate personal integrity.. Charismatic Leadership Skills ​ Vision: Charismatic leaders communicate a clear, long-term vision that inspires and motivates followers. This involves emphasizing the overarching purpose and explaining why individuals should care about the goals. ​ Connecting to History: Drawing connections between shared history and the future enhances the vision's appeal and resonance. ​ Body Language: Projecting energy, passion, and confidence through body language, including eye contact and a confident posture, strengthens the impact of the message. ​ Building Confidence in Others: Expressing belief in and trust in employees' abilities fosters their confidence and motivation. Addressing any skill gaps through training and mentoring is crucial. ​ Challenging Norms: Charismatic leaders question the status quo and encourage innovative and unconventional solutions to problems. Servant Leadership Skills ​ Focus on Others: Servant leaders prioritize the needs of their employees, aiming to support them and help them achieve their goals. This can involve identifying ways to reduce stress, shield them from excessive pressure, and provide practical assistance. ​ Understanding Individual Goals: Getting to know employees personally and understanding their values, priorities, and aspirations is essential for supporting their growth. ​ Humility: Acknowledging that a leader does not have all the answers and being open to learning from others is vital. Engaging in volunteer work can help cultivate humility. ​ Open Communication: Transparent communication with employees, including asking questions and sharing information about company developments, fosters trust and engagement. ​ Community Engagement: Encouraging employee involvement in community volunteer projects or developing strategies for positive community impact aligns with the servant leader's focus on serving others. Authentic Leadership Skills Authentic leadership emphasizes self-awareness, acting in accordance with one's values, and demonstrating integrity. The chapter suggests a process for developing authentic leadership through: Understanding Your History: ​ Reflecting on significant life events and how they have shaped you as a person. ​ Identifying your childhood role models and the lessons you learned from them. Taking Stock of Who You Are Now: ​ Understanding your personality and its influence on your life. ​ Recognising your strengths and weaknesses and seeking continuous self-improvement. Reflecting on Your Successes and Challenges: ​ Journaling to document challenges and strategies for overcoming them, while tracking progress. Making Integrity a Priority: ​ Identifying your core values. ​ Evaluating whether your actions align with your values and taking steps to ensure consistency. Understanding the Power of Words: ​ Being mindful of the language used to describe people and situations, recognising that words shape perceptions and experiences. For instance, referring to those you manage as "associates" or "team members" can create a more collaborative and positive environment compared to terms like "employees" or "subordinates".